After Indonesia’s new social media e-commerce prohibition, TikTok will stop processing transactions on its platform on Wednesday. On Tuesday, China’s ByteDance-owned TikTok announced it will work with Indonesia’s government on its plans.
“We prioritize local legal compliance. The business declared it will no longer support TikTok Shop Indonesia e-commerce.
The Indonesian government claimed last week’s ban protects physical retailers and marketplaces from predatory pricing on social media, which threatens small and medium-sized businesses.
The announcement did not indicate if TikTok will launch a separate e-commerce app. TikTok’s decision follows the Indonesian government’s one-week grace period to comply with the new law before shutdown.
Nilam, a Jakarta wholesale market trader who sells locally manufactured trousers, worries about lack of payment. She relies on TikTok Shop for 80% of her income and doesn’t know how to replace it.
“I’m very confused as to where I’ll earn money,” Nilam remarked, hoping TikTok Shop will reopen.
TikTok has vowed to invest billions of dollars in Southeast Asia, mostly Indonesia, over the next three years to expand its e-commerce platform TikTok Shop.
The firm has 125 million Indonesian monthly active users and wants to turn them into e-commerce income. Momentum Works said that 5% of Indonesia’s $52 billion e-commerce transactions were on TikTok last year.